NZ dollar little changed
"US interest rates, the US dollar, and equities are all slightly lower despite another round of strong US economic data"
The New Zealand dollar was little changed and may test new multi-month highs against the greenback as optimism about US President Donald Trump's economic policies starts to wane.
The kiwi was little changed at 72.29USc as at 8am in Wellington from 72.25USc yesterday. The trade-weighted index was at 78.58 from 78.55 yesterday.
Stocks on Wall Street fell from record highs and the US dollar index declined as investors pared their excitement over what Mr Trump's "phenomenal" but as yet undetermined tax policies may deliver. US economic data continued to show robust growth, and if Mr Trump's policies inject stimulus into the economy, that would warrant a sharper response from the Federal Reserve, which is poised to raise interest rates again.
"US interest rates, the US dollar, and equities are all slightly lower despite another round of strong US economic data," Westpac Banking Corp market strategist Imre Speizer said in a note. "The month ahead could see $NZ/$US extending beyond 75USc (the September high) if the US dollar continues to register disappointment in the Trump administration's policies."
Still, Mr Speizer sees the kiwi falling back to 70USc on a longer horizon given the Fed's bias for higher rates, which would stoke demand for the greenback, and trump New Zealand's strong economic outlook. Local data today include December quarter retail sales and January manufacturing figures.
The kiwi fell to 81.89 yen from 82.22 yen yesterday as Japan's currency was a beneficiary of investors' lower appetite for risk-sensitive assets.
The local currency declined to 67.77 euro cents from 68.08 cents yesterday after European data showed the eurozone posted a record current account surplus in November and was little changed at 57.98 British pence from 57.96 pence as figures showed the pace of growth for UK retail sales slowed in December.
The kiwi increased to 4.95 Chinese yuan from 4.9443 yuan yesterday and gained to 93.92 Australian cents from 93.66 cents.
(BusinessDesk)
Paul McBeth
Fri, 17 Feb 2017
Fri, 17 Feb 2017
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NZ dollar little changed
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